Do you think that any standardisation of qualifications for advisers will improve public trust in the insurance industry, leading to an uptake in the amount of people seeking independent advice?
Fahim Antoniades, Quantum Money Limited
Whether through large insurance companies, banks, the Post Office, supermarkets or financial advisors, the public has a large array of avenues through which they could buy their insurance needs. My perhaps biased view is that those buying insurance products through supermarkets for example, are "sold to" and "processed" rather than advised; I have yet to see a supermarket identify a potential IHT problem as a result of selling someone life insurance.
If the regulators are serious about transparency, then they should pay as much attention to helping the public understand the degree of advice they have received as well as on standardisation of qualifications; the buying public will not necessarily have the time or inclination to understand the qualification standards the industry has to adhere to. Would for example, a system whereby the insurance products sold are given a visual rating - similar to energy certificate ratings on white goods - to reflect the degree of advice given, be better in winning the public's trust?
Personally, I am a strong believer in regulation and standardisation of qualifications as I believe it gives the basis for setting minimum standards of professionalism. However, the operative words are "setting the basis" and "minimum", because professionalism is as much a by-product of qualifications as it is of attitude. For all the benchmarking and certifications, ultimately, public trust is won by those intangible and unquantifiable qualifications such as a genuine desire to do right by the client as opposed to racking up the next sale.
Andy Milburn , Munich Re
I really don't believe that consumers make a connection between their continuing / perceived ‘lack of trust' in our industry and the standardization of adviser exams. It's just not on their radar. This is another example of our industry thinking that something is more important than it actually is because we're too involved in it to see otherwise!
What do we want in an adviser? Wisdom, experience, clarity of communication, the ability to see all options, the ability to see what is important - and what isn't. A track record of happy / satisfied clients helps too. If you take all of those criteria then wisdom is the key area that exams help advisers to develop, but their exams can never do that in isolation.
I'd like to see advisers sitting exams that teach them more about the ‘real world' in future. Let's take the CF3 protection exam for advisers as an example. It's a one hour multiple choice paper. When I sat my CF3 exam a few years ago it didn't mention trusts or Critical Illness conditions once. It needs an upgrade.
It's time for those of us in the industry who have been saying that we need a better individual protection exam to either put up or shut up as the new CII group risk exam puts us to shame. Munich Re is all for supporting a cross-industry project team to look at a new protection exam and then DOING it. If anyone else out there fancies helping then let Cover know. That's the exam we can do something about so why not have a go?
Ian Smart, Bright Grey
The main problem with adviser qualifications is the plethora of designations that can be used once the relevant exams have been passed. This certainly doesn't help the person in the street in understanding the level of knowledge an adviser has or whether it is relevant to the advice they are seeking. Because of this it probably plays only a small part in many people's choice of which adviser to use.
However, I'm not suggesting there should be only one examination or one examining body as a monopoly is rarely a good thing when it comes to something that is compulsory in order for you to continue in business. But if there was one designation used irrespective of the route taken with subcategories showing any specialisation this would perhaps allow people to determine the level of qualification and relevance more easily. People understand the differences between GCSEs, A levels and a degree. But they have little understanding of the designations chartered financial planner, certified financial planner or someone holding a diploma in financial planning.
I believe a greater understanding would allow a greater trust in advisers to develop. But I don't believe this would have a significant effect on the number of people who use independent advisers. After all you don't need to be independent to take and pass the exams. Independent advisers providing outstanding service to their existing client bank will have a greater effect on building their business through developing trust and loyalty than the letters they have after their name."
Peter Staddon, British Insurance Brokers Association (BIBA)
Do BIBA members need professional insurance qualifications? We should remind ourselves that it was the FSA that decided to require those in the industry engaging with the public and business to be competent, rather than setting down specific qualifications for them to achieve. In my view, competency is more important and this is, by and large, obtained through ‘on the job' activities.
I am not belittling insurance qualifications. I believe that such qualifications show the world the importance the individual has placed on understanding the industry that they are advising on and their dedication. But does passing an insurance exam qualify an individual to do the job? Basically - No. Hence the reason why I believe the FSA chose to enforce competence. So the question then becomes: "Am I competent to do the job?" This is where on the job training and understanding comes in to play.
Judy Rosenblum, the business learning and strategy expert, said when referring to formal professional training and education that: "Technical skills and methodology are the corridors of practice." If we assume that this passage has doors then we need to know what is behind them and more importantly how to open them. Those already in the broking profession particularly the more senior members must help open these doors to share their knowledge and help train to ensure competency in the next generation.
Professional qualifications are essential and should be the starting point, but they are not the be all and end all. Competence is vitally important too. We need to understand the solution we can bring to the customer's table and have the courage to change the things we can, the serenity to accept the things we cannot and the wisdom to know the difference between the two.
